System and method for developing technology assets

ABSTRACT

An automated method for developing new products within a development entity, comprises receiving respective catalogs of technology assets, each including at least one of a patent, trade secret, know-how, documentation, prototypes, pre-production units, production samples, tooling, and demonstration frameworks. Each catalog corresponds to a discrete pool of technology assets having subject matter in common. The development entity also receives, from the originating owner, title to each pool in exchange for an equity interest in the development entity and an option to re-acquire the pool upon payment of a reacquisition fee to at least one primary investor. Further development of each technology asset pool is funded by at least one primary investor, who receives an equity interest in the development entity in exchange for its capital investments. Costs expended by the development entity to develop new product concepts corresponding to each asset pool are separately tracked. If the re-acquisition option is exercised, these costs form the basis for calculating the fee to be paid. If not, monetization is achieved by selling and/or licensing elements the enhanced technology asset pool to a spin-off entity funded by at least one secondary investor.

REFERENCE TO RELATED APPLICATIONS

This application relates to U.S. Provisional Patent Application61/066,505 filed Feb. 21, 2008.

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention relates to systems and methods for extractingvalue from a portfolio of assets.

2. Discussion of the Prior Art

A successful, growing enterprise will generally reinvest a substantialportion of its revenue on research and development activities, theprincipal objective of doing so being to generate a pipeline of productideas and, ultimately, a continuing stream of marketable products. Toprotect the inventions, works of authorship, and know-how which arisefrom such activities and, thereby to secure the anticipated benefits ofemerging market opportunities, a large corporation may spend tens ofmillions of dollars or more annually on the filing of patentapplications and copyright registrations and the maintenance of issuedpatents.

Often, an enterprise committed to protecting its investment in researchand development will accumulate a substantial number of discrete assetportfolios each potentially consisting of a number of patents,copyrighted works of authorship, and know-how corresponding to aparticular product or process concept or a related family of suchconcepts. When a product idea is regarded as a good fit with respect toa corporation's current or target customer base, the enterprise mayspend millions of dollars on further product development, manufacture,and marketing. Conversely, even if a product idea has an immediate andaccessible market, an enterprise may not incur the expenses ofcommercialization if it is perceived as not fitting within apre-identified “core” or strategic focus area. The corporate owner knowsthat if its “stranded” IP assets remain where they are their value willlikely diminish over time as the associated human capital and know-howdisappears and the potential patent position stagnates or declines. Insuch cases, the enterprise may pursue other ways of extracting valuefrom or “monetizing” the corresponding asset portfolio. A corporationseeking to monetize some or all of its intellectual property portfolioassets has heretofore been presented with a limited set of conventionaloptions. These options include either the outright sale of a patent orset of patents, patent licensing or a wholly-owned,Joint-Venture-(“JV”)-based or Venture-Capital-(“VC”)-financed, spin-out.

The simplest monetization alternative is an outright sale of the patent.The buyer could be a company that is already operating in the technologyspace represented by the patent or one that is about to enter the field,or, with increasing frequency, the buyer may be an institutional patentaggregator. The former may be characterized as a strategic buyer and thelatter as a financial buyer. The purchase price can be a lump sum,either in cash, stock, or a combination of the two, or it can involve acontinuing revenue stream (a “tail”) based on performance. In the lattercase, the seller will usually retain a reversionary interest in thepatent(s) such that if certain financial milestones are not met,ownership reverts to the seller.

If the seller is an operating company, sale of a patent may also involveretention of some rights under the patent by the seller via areservation of rights or a grant-back license. The grant-back may benonexclusive or, if the buyer and seller are in different fields (andthe patent covers both), an exclusive license within the field of theseller's business. In either case, issues as to whether the grant-backlicense: a) includes sub-license rights; b) covers follow-on orimprovement patents granted to the buyer; and/or c) survives change ofcontrol of the seller/licensee are important, are often contentious, andcan be the subject of substantial negotiation.

Another monetization model involves the granting of one or moreexclusive field-of-use licenses. Where the patent(s) cover not only thepatent owner's products and markets but other applications as well, thepatent owner may grant a third party an exclusive field-of-use licensefor all fields outside the owner's business. A well-known variant ofthis approach is for the patent owner to define “core” versus “non-core”applications of its patents to its business and grant nonexclusivelicenses others for the non-core applications. Alternatively, instead ofgranting a single exclusive field-of-use license, the patent owner candefine a number of non-overlapping applications of the patent, sometimescalled “verticals,” and grant an exclusive license within each verticalto a different party. Finally, to the extent that several parties are indifferent businesses and they each have patents covering both theirbusiness and the business of the other party, they can enter intoexclusive field-of-use cross-licenses, whereby each party aggregates anexclusionary position in its field of interest.

Another monetization model utilizing a licensing transaction involvesthe granting of a nonexclusive license coupled with the transfer ofknow-how, technical support, etc. This is generally referred to as atechnology license and represents the difference between “stick”licenses (the assertion model) and “carrot” licenses (the businessopportunity model). In addition to the conventional research anddevelopment (“R&D”) and intellectual property (“IP”) licensing functionsrequired to produce the know-how, this model further requires some formof customer support activity. The customer support activity assists thecustomer in integrating the licensed technology into its products orprocesses.

The final category of IP monetization strategy is the spin out. It isnot unusual for a company to spin-out (or spin-off) a particularcorporate business unit, division, or technology that is either nolonger “core” to the business of the company or is not sufficientlyprofitable. The divestiture can be complete, i.e., the seller retains nofurther interest in the divested business (spin-off), or the seller canmaintain an ongoing financial stake in the new venture (spin-out). And,as in the case of sale of patents per se, the seller may want to retainlimited rights to the IP that is owned by the new entity, e.g., by wayof an exclusive field-of-use grant-back license. One of the mostdifficult, and often contentious issues in the divestiture of less thanan entire business is which patent rights remain with the seller andwhich go with the spin-out. This is typically resolved with somecombination of ownership allocation via assignment and licenses to thenon-owning party, which may be limited to the field of the retainedbusiness, and may be exclusive or nonexclusive (usually depending on therespective leverage of the parties). An illustrative monetizationvehicle is the formation of a joint venture around a new corporateentity and the transfer by one or more of the joint venture partners ofa subset of their patent rights to the new entity. For example, anaircraft manufacturer may have patents covering a local area network(“LAN”) architecture for the control and communication systems on anaircraft, but the patent claims may be broadly written to cover“vehicles” rather than “aircraft.” The aircraft manufacturer could forma new entity joint venture with an automobile manufacturer. In exchangefor equity in the new entity, the aircraft manufacturer would contributean exclusive field-of-use license under its LAN patents in theautomotive field, and the auto manufacturer could contribute operatingcapital and management expertise in the automotive area. Another exampleinvolves companies in complementary but noncompetitive fields poolingtheir expertise and IP in a new area that exploits both partners'capabilities. In such a case, each partner would grant an exclusivefield-of-use license to the new entity limited to the field of the newentity's business (which is defined so as to not overlap with thebusiness of either joint venture partner). In addition, one or more ofthe partners could contribute operating capital, unpatented know-how,machinery and equipment, technical employees, and/or managementexecutives to the new entity.

Each of the aforementioned IP monetization strategies enables thecorporate owner of non-core, stranded IP and perishable technologyassets (i.e., patents, trade secrets, know-how, documentation,prototypes, pre-production units, production samples, tooling anddemonstration frameworks) to derive value from what would otherwise beunproductive assets. They all share a unifying disadvantage, however.Specifically, the outright sale or divestiture of an intellectualproperty asset to a third party or spin out entity is a permanent,irrevocable act. If the acquiring party uses a proprietary IP positionto build a fast-growing, profitable business, the party whichtransferred that IP position may regret what had seemed like a gooddecision at the time. In that regard, an overly cautious management teamwill have a tendency not to act at all rather than take the chance oftransferring what might later become a significant business opportunity.Such caution may very well be justified given that the decision to granta license to or transfer ownership of an IP asset or portfolio is oftenmade at a very early stage—i.e., before an invention has been fullydeveloped or test marketed to gauge its prospects for commercialsuccess.

A continuing need therefore exists for an IP monetization system andmethod which enables the corporate owner to maximize its return onresearch and development investments while preserving flexibility in thedecision making process for as long as possible.

A need also exists for a system and method for striking a risk-rewardbalance among one or more corporate owners of IP asset portfolios andselected investors that will promote the formation of new businessstructures and/or lead to the commercialization of emerging technologieswhich would otherwise go unexploited.

Yet another need exists for an automated system which serves as anefficient platform for focusing financial and management resources oncertain classes of non-core stranded IP and perishable technology assetsin order to improve the underlying technology through adaptation andvalidation, and to extend intellectual property protection.

SUMMARY OF THE INVENTION

A computerized method for developing technology assets in accordancewith an illustrative embodiment of the invention comprises storing in adatabase a re-acquisition record associating a Technology Contributor, aNew Company; and the terms under which the Technology Contributor mayre-acquire at least a portion of the transferred equity in the NewCompany. The illustrative embodiment further includes storing in thedatabase a cost record associating the New Company and the DevelopmentEntity's costs associated with the New Company, storing in the databasean investment record associating the New Company and the terms underwhich an Investor invested in the New Company. The illustrativeembodiment further includes receiving a trigger and, in response,retrieving factors to be used to compute a re-acquisition amount theTechnology Contributor should pay to re-acquire at least a portion ofthe New Company from the reacquisition record, the cost record, and theinvestment record, and reporting those factors.

The aforementioned needs are addressed, and an advancement is made inthe art, by an automated method for developing new products within adevelopment entity that comprises receiving respective catalogs oftechnology assets, each including at least one of a patent, tradesecret, know-how, documentation, prototypes, pre-production units,production samples, tooling, and demonstration frameworks. Each catalogcorresponds to a discrete pool of technology assets having subjectmatter in common. The development entity also receives, from anoriginating owner, title to each pool of technology assets in exchangefor an equity interest in the development entity and an option tore-acquire the pool upon payment of a reacquisition fee to at least oneprimary investor.

The financial burden of any additional development activity needed tocommercialize and/or broaden each technology asset pool may be sharedwith or entirely borne by one or more primary investors. The primaryinvestor(s) receive an equity interest in the development entity, then,in exchange for an initial and any subsequent investments. The equitystake acquired by the primary investor(s) may be a majority orcontrolling interest.

Costs expended by the development entity to develop new product conceptscorresponding to each asset pool are separately tracked. Thus, if theoriginating owner desires to re-acquire the technology assets (alongwith any improvements and enhancements thereto resulting from innovativedevelopment activity performed by the development entity), the actualcosts may serve as a basis for calculating the fee to be paid. By way ofillustrative example, the primary investor(s) and originating owner mayagree up front that the re-acquisition fee will be a 5× multiple of theactual costs of all development activity and administrative overheadattributable to the asset pool to be re-acquired.

As an alternate exit strategy, the enhanced technology asset pool may beconveyed to a spin-off entity funded by at least one secondary investor.In this event, the development entity may receive an equity stake and/ora cash payment in consideration of the conveyance.

BRIEF DESCRIPTION OF THE DRAWINGS

The aspects of the present invention will become more apparent bydescribing in detail illustrative, non-limiting embodiments thereof withreference to the accompanying drawings, in which like reference numeralsrefer to like elements in the drawings.

FIGS. 1 and 5 are conceptual diagrams representing a non-limitingembodiment of the relationships between thedevelopment/commercialization entity, the originating owner whichcontributes technology assets to the development entity, primaryinvestor(s) who provide capital needed to establish and operate thedevelopment entity, and respective spin-off entities funded by one ormore secondary investors.

FIG. 2 is a conceptual diagram depicting a non-limiting embodiment ofone of several development incubator units responsible fordevelopment/commercialization activity within the development entity,each incubator unit corresponding to one of the technology asset poolstransferred to the development entity.

FIG. 3 is a flowchart depicting one non-limiting example showing a poolof unutilized, non-core technology assets being transformed bysubsequent development activity into a more refined class of assetsready or nearly ready for commercialization by either a spin-off entityor the originating owner.

FIG. 4 is a block diagram depicting a system for creating andmaintaining a dynamic portfolio of technology assets and tracking allcosts and activities associated with their further development

FIG. 6 is a flowchart depicting one non-limiting example showingunutilized, non-core technology assets from a Technology Contributorbeing transformed by a Development Entity through subsequent developmentactivity into a more refined class of assets owned by a New Company thatcan be re-acquired by the Technology Contributor.

FIG. 7 is a conceptual block diagram of one non-limiting example showinga single Development Entity developing technology for a number ofTechnology Contributor/New Company/Investor groups.

FIG. 8 is a conceptual block diagram of one non-limiting example of aDevelopment Entity cable of developing technology for a number ofTechnology Contributor/New Company/Investor groups.

FIG. 9 is a conceptual block diagram of one non-limiting example of aConsolidated Administrative Support and Expense Tracking System.

FIG. 10 illustrates one non-limiting example of functions associatedwith various modules within the Consolidated Administrative Support andExpense Tracking System.

DETAILED DESCRIPTION

The techniques disclosed herein are directed to a new system and methodfor extracting value from a portfolio of assets. The novel processescomprising this model will have greater appeal to prospective clients inthe business world, as well as the potential to extract a greater returnon investment from classes of non-core stranded intellectual propertyand perishable technology assets within a large portfolio of technologyassets owned by one or more originating corporate owners. Examples ofthese assets include, but are not limited to, patents, patentapplications, copyrights, trademarks, trade secrets, know-how,documentation, prototypes, source and object code, pre-production units,production samples, tooling, demonstration frameworks, and even realproperty and specialized production equipment. To simplify thedescription hereinafter all types of assets are referred to herein assimply “assets” or “technology assets.”

The techniques described herein encompass the transfer of discrete poolsof assets to a development entity, from the originating owner to adevelopment entity, to which a “re-acquisition option” is offered to theoriginating owner. As illustrated in FIG. 1, in one embodiment theoriginating owner indicated generally at 10 transfers ownership of whatit deems to be non-core assets to development entity 12, the assetsbeing related in some way by subject matter. Patented and patentableinventions are especially suitable candidates for transfer because attheir incipiency, it is usually difficult to assess their impact, marketsize and potential, and technological feasibility without a significantescalation in investment and, hence, risk. Advantageously, in oneembodiment, development entity 12 is the vehicle by which the financialrisks and rewards of further, needed development effort may be shared byparticipants with a higher level of risk tolerance such, for example, asprimary (seed) investor 14. Other asset candidates include proofs ofconcept (which allow the estimation of the value-proposition of theinvention), alpha prototypes (which demonstrate technologicalfeasibility and physical proof that the technology delivers the intendedvalue proposition for the targeted application), beta prototypes (mostdevelopment and manufacturing costs have been resolved), and productswhich have “missing pieces” where the effort required to address thegaps is small relative to the potential value that would be created.Advantageously, the “reacquisition option” conveyed by developmententity 12 back to originating owner 10, along with an equity stake,provides a sufficient incentive to overcome the corporate owner'sinstinctive desire to retain assets it has little likelihood of everexploiting.

With continuing reference to FIG. 1, it will be seen in one embodimentthat within development entity 12 are a number of development incubatorunits indicated generally at 16, 18, and 20, respectively. As will beexplained in greater detail shortly, each incubator unit is responsiblefor the further development of one or more selected product conceptsbased upon inventions and other ideas embodied in a singular assignedasset pool. Turning briefly to FIG. 2, it will be seen that eachincubator unit, such as incubator unit 16, includes an assigned assetpool 16A, and a group 16B of product development team members assignedthe task of developing new innovations based upon the original assignedasset pool. Block 16C represents the creation of proprietary protectionsuch as additional patents, copyrights and trade secrets as a result ofthe development activity, with these new assets being added to assignedasset pool 16A. Likewise, block 16D represents the creation of newproducts ready for commercialization.

Returning now to FIG. 1, it will be seen that, in one embodiment,development entity 12 further includes a consolidated administrativesupport and expense tracking function indicated generally at referencenumeral 22. The progression from an initial patented or patentableinvention to working prototypes, proofs of concept and commercializationcandidates is typically an expensive one. In exchange for its initialcapital investment, primary investor(s) 14 preferably receive acontrolling equity stake in development entity 12. However, due to theexistence of the re-acquisition option conferred upon originating owner10, some mechanism is needed for providing primary investor 14 with anacceptable return on its investment. In accordance with an illustrativeembodiment of the present invention, this rate of return ispre-negotiated between originating owner 10 and primary investor 14. Byway of example, the parties may agree that primary investor 14 willreceive a three to five times multiple of all expenses associated withthe development activity performed by the corresponding incubator unitas unit 16. To the extent the incubator team further includes amanagement team charged with the creation of business plans, marketingstrategies and assessments, and sales efforts, the parties mightadditionally agree that these members of the team may also receive apre-negotiated exercise fee. Similarly, the technical members of theaffected incubator unit may also receive a pre-negotiated exercise fee.In any event, it will be readily apparent to those skilled in the artbased on the foregoing that the reacquisition option gives rise to aneed for the development and administrative costs incurred by eachincubator unit as units 16, 18 and 20 to be separately tracked bytracking function 22.

With continued reference to FIG. 1, it will be seen that, in oneembodiment, a plurality of spin off entities indicated generally atreference numerals 24, 26, and 28 may be established, with each spin-offreceiving a pool of assets from development entity 12 in exchange for acash payment and/or an equity stake in the applicable spin-off.Advantageously, capital for the formation and operation of the spin-offentities may be provided by secondary investors, indicated generally at30, 32, and 34, thereby affording the equity owners of developmententity 12 with an opportunity to realize an immediate return on theirinvestment.

Turning now to FIG. 3, a flow chart depicting the development of assetpools in accordance with the teachings of the present invention will bedescribed. As seen in FIG. 3, in one embodiment the process is initiatedat 300 with the establishment of an asset pooldevelopment/commercialization entity. The entity may take anytraditional corporate form such, for example, as a limited liabilitycompany (LLC), an S-corporation, or a C-corporation.

In one embodiment, at 302, a catalog or listing of the assets formingthe asset pool is provided by the originating owner. The catalog orlisting of assets may be transmitted electronically from the originatingowner using a computer accessible through a wide area network or it maybe delivered in hard-copy form. This catalog of technology assetsincludes at least one of a patent, trade secret, know-how,documentation, prototypes, pre-production units, production samples,tooling, and demonstration frameworks, and corresponds to a first poolof technology assets having subject matter in common. The developmententity also receives title to at least some of the assets comprising theasset pool, but may also receive licenses to certain categories ofassets such, for example, as trademarks or patents the originating ownerhas a legitimate need to retain. As noted above, in one embodiment, inexchange for this contribution of assets, the originating owner acquiresan equity interest (e.g., a 20% ownership interest) in the developmententity, along with the aforementioned re-acquisition option.

At 304, in one embodiment, the development entity receives seed capitalfrom a primary investor in exchange for an equity interest (e.g., acontrolling interest). The process proceeds to 306 wherein a firstdevelopment incubator unit is established and assigned the task ofdeveloping ideas and product concepts utilizing an acquired asset poolas the foundation. The incubator unit includes a team of engineers andtechnical staff members and may, optionally, include managerial,marketing and sales staff. To maximize efficiency, however, centralizedfunctions such as legal, human resources, facilities management andother infrastructure functions, are performed by a consolidated teamwhich supports all of the incubator units. In addition, engineers andother technical staff may be shared among development incubator units.In one embodiment, an equity stake is provided to selected members ofeach incubator unit, the goal being to foster an entrepreneurialatmosphere that is likely to be different from that fostered by theoriginating owner.

In one embodiment, at 308, a first new product concept relating to theasset pool is selected for development activity by the incubator unit.As innovation activity gives rise to new inventions, know-how, and otherproprietary rights, appropriate protection is applied for andcorresponding new assets are added to the asset pool. In one embodimentat 310, the costs expended by each incubator unit are tracked in adatabase. These costs include those expended to develop any new productconcepts, those associated with the acquisition of proprietary rights,and a share of the administrative overhead associated with operating thedevelopment entity.

In one embodiment, at decision block 312, a determination is made as towhether the originating owner wishes to exercise the re-acquisitionoption (i.e., pay a fee and re-acquire the pool of assets that includesany improvements as well as all necessary personnel). If yes, theprocess proceeds to 316 whereupon the assets and employees arereassigned to the originating entity. If no, then the process advancesto 314.

In one embodiment, at 314, a spin-off is formed through a capitalinvestment by one or more secondary (e.g., Series A) investors whoseinvestment makes it possible to purchase from an enhanced asset poolfrom the development entity, thereby providing the originating owner,primary investor, and others having an equity stake in the developmententity, with an opportunity to realize a prompt return on their initialinvestment. Of course, any combination of cash and equity may beconveyed by the newly formed spin-off entity in exchange for theenhanced asset pool. In any event, the process terminates at 317.

Many of the processes described above may be implemented by a computersystem, such as the system 400 depicted in the block diagram of FIG. 4.In one embodiment, a user-friendly graphical user interface 420 (“GUI”)facilitates access for the originating owner and primary investor over anetwork 422, such as the Internet, to a server 410, such as a secure webportal server, where various transactions and operations related tomonitoring development activity and associated costs may be performed.In one embodiment, an Investor GUI 428 facilitates investor access. Theserver 410 either contains or is coupled to a searchable database 430.In one embodiment, server 430 functions as an administrative support andexpense tracking server.

The server in one embodiment includes a pool creation module 412, a poolupdate module 414, an expense tracking module 416, a reacquisitionmodule 418, and a spin off module 420. The modules within server 430communicate with network 422 by way of a network interface 424 and withthe database 430 by way of a database interface 426.

In one embodiment, database 430 contains indexed information describingthe portfolio of assets. For example, the assets can be indexed withinthe database according to a variety of aspects. In one example, an assettable is used reflecting a portfolio of assets. Each row in the assettable corresponds to an asset from a pool of assets. Each asset isassigned an asset identifier as well as a cost identifier. Withparticular reference to those assets which are created during innovatingactivity within a corresponding incubator unit, costs may be allocatedto each asset on a pro-rate basis. Thus, for example, if the developmentactivity associated with the development of a new product conceptresults in the creation of four patent applications, the cost of allactivity may be equally apportioned to each of the patent applications.In one embodiment the asset table further includes an encumbranceidentifier to identify whether a license interest has been previouslygranted to any third party by the originating owner, as well as anincubator unit identifier to identify which development team within thedevelopment entity is responsible for further development activity.

With continuing reference to FIG. 4, it will be seen that in oneembodiment pool creation module 412 can be used through the GUI 420 bythe originating owner and primary investor(s) to establish discretepools of assets and assign the pool of assets to an incubation unit atthe time of transfer. The pool update module 414 can be used through theGUI 420 in one embodiment to modify the list of assets assigned to apool of assets and to perform related operations concerning the pool ofassets. The GUI 420 can be used in one embodiment to monitor theprogress and costs of development activity maintained by expensetracking module 416 and determine the current re-acquisition fee ascomputed by re-acquisition module 418.

FIG. 5 illustrates another embodiment of a system for developingtechnology assets in which a single Development Entity can support thedevelopment of technology contributed by one or more TechnologyContributors. FIG. 6 illustrates the process that is followed to developtechnology assets through the embodiment shown in FIG. 5.

In one embodiment, the process begins at 605 by establishing aDevelopment Entity 505. In one embodiment, the Development Entity 505can be staffed by engineers, scientists, and other personneltransferred, loaned, or seconded from another company. Further, inaddition to or instead of these personnel, the Development Entity mayhire personnel using conventional hiring techniques.

In one embodiment, at 615, a New Company 510 is established. In oneembodiment, a Technology Contributor 515 transfers technology assetsfrom the Technology Contributor 515 to the New Company 510 in exchangefor 100 percent of the New Company's equity.

In one embodiment, at 620, the Technology Contributor 515 transfers 80.1percent of the equity it owns in the New Company 510 to the DevelopmentEntity 505. Immediately after the transfer, the Technology Contributor515 owns 19.9 percent of the equity in the New Company 510. Because theTechnology Contributor 515 owns less than 20 percent of the stock in theNew Company 510, the Technology Contributor 515 is not obligated toreflect the profits and losses of the New Company 510 on its books.

In one embodiment, in return for the transfer of equity, the TechnologyContributor 515 receives a true-up right and a re-acquisition right. Inone embodiment, one or both of the rights are contractual and arecaptured in a written contract. In one embodiment, one or both of therights mature upon the occurrence of a trigger. The trigger for thetrue-up right may be different from the trigger for the re-acquisitionright. There are many possible triggers, including a new round offunding, an offer for sale of the New Company, an offer to purchase theNew Company, a fixed time (e.g., 1 year) or declaration by the board ofdirectors of the Development Entity that the option has ripened. Theseare merely examples. A person of ordinary skill would recognize thatmany other triggers exist.

In one embodiment, the true-up right is the right of the TechnologyContributor 515 to receive an accounting of the true value of its equityat the time that the trigger occurs. The accounting takes into accountthe value of the technology assets originally contributed by theTechnology Contributor 515 to the New Company 510, the value of thetechnology developed by the Development Entity 505 and transferred tothe New Company 510, and the amount of dilution that may have occurredbecause of investments by other investors.

In one embodiment, a valuation may occur each time technology assets orfunds are contributed to the New Company. In one embodiment, thevaluation is performed according to industry standards for suchactivities and may be done by a consultant that specializes in suchvaluations. In one embodiment, the valuation is done by negotiationbased on technology risk and market risk. In one embodiment, thevaluation varies in inverse proportion to those risks; that is, thesmaller the risk, the higher the valuation. In addition, the valuationwill depend on the size of the market being addressed and the amount oftime that it is expected to be necessary to penetrate the market.

In one embodiment, the valuation also takes into account the servicesperformed by the Development Entity 505, and the funds expended by theDevelopment Entity 505, on behalf of the New Company 510. In oneembodiment, the equity in the New Company 510 owned by the DevelopmentEntity 505 increases with its investments in services and funds onbehalf of the New Company 505.

In one embodiment, the valuation also takes into account equity awardedto Development Entity personnel to encourage the development of thetechnology necessary for the New Company 510 to launch products.

In one embodiment, it is assumed that, by the time the trigger occurs,the Technology Contributor 515 will own 19.9 percent, the DevelopmentEntity personnel will own 20 percent, and the Development Entity 505 andany seed investors that invest at the same time as the DevelopmentEntity 505 will own 60 percent of the New Company. The less developmentthe technology requires, the less this assumption is true. As theDevelopment Entity invests more funds and services in the New Company itearns its percentage of New Company equity. If the technology investedby the Technology Contributor is ready for market, or nearly so, theDevelopment Entity will have to do less work and will consequently earnless of its percentage. The variations from assumed investments areaccounted for in the true-up process. In one embodiment, the true-upprocess adopts these percentages without a formal or informal valuationprocess.

In one embodiment, the re-acquisition right is the right of theTechnology Contributor 515 to re-acquire the New Company 510 upon theoccurrence of the trigger. In one embodiment, the Technology Contributor515 agrees to pay a fixed multiple of any investor contribution to theNew Company 510. For example, if the multiple is 5 and the investorcontribution to the New Company 510 is one million dollars, theTechnology Contributor 515 must pay five million dollars for theacquisition. The acquisition itself is performed in a conventionalmanner.

Returning to FIGS. 5 and 6, at 625, in one embodiment the DevelopmentEntity 505 receives a capital investment from one or more Investors 520.In return, the Investors 520 receive equity in the New Company 510. Thecapital contribution by the Investors 520 is a factor in subsequentvaluations, as described above.

At 630, in one embodiment the Development Entity 505 invests money andservices in the New Company 510. The Development Entity hastechnologists (e.g., engineers, scientists, programmers, etc.) that workon projects to develop technology and products for the New Company. Asthe Development Entity develops technology, that technology and theassociated intellectual property is assigned to New Company. In most, ifnot all, cases the Development Entity retains a license to thetechnology that it transfers. In some cases, the Development Entity maydevelop technology that is not core to the New Company. In those cases,the Development Entity may not transfer the technology to the NewCompany.

As time progresses, the Development Entity develops new technology andperhaps new products that may be released into the market. As a result,the value of the technology and new products and the value of the NewCompany may increase.

At 635, a trigger event occurs. As discussed previously, a New Company510 may have any number of trigger events. In one embodiment, when thetrigger event occurs, the Technology Contributor 515 must decide whetherto exercise the true-up right or whether to reabsorb the New Company. Inone embodiment, the Technology Contributor is given notice that thetrigger has occurred and that a true-up will occur. In one embodiment,the same notice starts a notice period for the Technology Contributor toexercise its option to re-acquire the New Company. In one embodiment,the Technology Contributor has 30-45 days to exercise the option,although it will be understood that the notice period can be anyreasonable period of time.

In one embodiment, the Technology Contributor 515 is not required toexercise either the true-up right or the re-acquisition right. However,since the next step for the New Company 510 is likely to be seeking anew round of funding, which will dilute the Technology Contributor'sownership of the New Company, it is unlikely that the TechnologyContributor will not exercise the true-up right if it does not exercisethe re-acquisition right. In one embodiment, the Technology Contributoris contractually required to exercise either the true-up right or there-acquisition right.

As shown in FIG. 7, in one embodiment the same Development Entity 505(abbreviated “DE”) can have the relationship described above with morethan one set of Technology Contributors (abbreviated “TC”), NewCompanies (abbreviated “NC”), and Investors (abbreviated “I”). In FIG.7, the Development Entity has interfaces with a first group 705,consisting of TC1, NC1, and I1, a second group 710, consisting of TC2,NC2, and I2, a third group 715, consisting of TC3, NC3, and I3, andother groups up to an Nth group 720, consisting of TCN, NCN, and IN.

FIG. 8 illustrates one possible organization of the Development Entity505 that accommodates more than one sets of Technology Contributor, NewCompany, and Investor, such as is shown in FIG. 7. In one embodiment,the Development Entity 505 includes a plurality of Developer IncubatorUnits 805, which are similar in form and function to the DeveloperIncubator Units 16, 18, 20 illustrated in FIG. 1 and described above. AConsolidated Administrative Support and Expense Tracking System(“CASETS”) interfaces with the Technology Contributors 815, NewCompanies 820, and Investors 825. For clarity, other interfaces shown inFIG. 7 are not shown in FIG. 8.

In one embodiment, the CASETS block, which is illustrated in greaterdetail in FIGS. 9 and 10, manages the flow of property rights to andfrom the various entities illustrated in FIGS. 7 and 8. It manages theassignment of costs associated with the services and funds provided tothe various New Companies, the transfer of technology to the NewCompanies, and the retention of licensing rights by the DevelopmentEntity. It manages the triggers for the true-up rights and there-acquisition right. It also performs many of the traditional overheadfunctions, such as accounting, human resources, legal, informationtechnology, etc., for the Development Incubator Units 805 and for theNew Companies. It will be understood that the CASETS block 810 could beentirely within the Development Entity 505, as shown in FIG. 9, or itcould be located in another entity shown in FIG. 9. Alternatively, itcould be distributed across two or more of the entities shown in FIG. 9.

In one embodiment, a user-friendly GUI 905 facilitates access for theoriginating owner and primary investor over a network 910, such as theInternet, to the CASETS block 810, which may be a server, where varioustransactions and operations related to monitoring development activityand associated costs may be performed. In one embodiment, an InvestorGUI 915 facilitates investor access. In one embodiment, the CASETS block810 either contains or is coupled to a searchable database 920. Thedatabase 920 may be localized to the location of the Development Entity505 or it may be distributed geographically among one or more of theDevelopment Entity 505, the Technology Contributors 815, the NewCompanies 820, and the Investors 825.

In one embodiment illustrated in FIGS. 9 and 10, the CASETS block 810includes a Developer Incubator Unit (“DIU”) Module 925, a New Company(“Newco”) Module 930, an Intellectual Property (“IP”) Module 935, anInvestor Module 940, a Technology Contributor (“TC”) Module 945, and anAdministrative (“Admin”) Module 950. The modules within the CASETS block810 communicate with network 910 by way of a network interface 955 andwith the database 920 by way of a database interface 960. Further, whilethe modules are shown in FIGS. 9 and 10 as having distinct functions, itwill be understood that the functions can be transitioned from onemodule to another. In addition, the functions can be inter-relatedthrough the use of, for example, a relational database system.

As indicated in FIG. 10, in one embodiment the DIU Module 925 tracksintellectual property as it is developed. It tracks inventiondisclosures, patent applications, patents, and other manifestations ofintellectual property. In particular, the DIU Module 925 tracks whichDevelopment Incubator Unit developed a particular item of intellectualproperty so that an assignment to the appropriate New Company can laterbe accomplished.

In one embodiment, the DIU Module 925 also tracks the time expended byDevelopment Entity personnel in support of a given Development IncubatorUnit and the costs incurred, such as by the use of capital equipment,parts, research laboratories, manufacturing test beds, etc., can belater taken into account in a true-up calculation.

In one embodiment, the Newco Module 930 tracks the technology that hasbeen transferred to each New Company and the licenses retained by theDevelopment Entity. In addition, the Newco Module 930 tracks theservices and funds provided to the New Companies.

In one embodiment, the Investor Module 935 tracks for each New Company:(a) the identity of the investors, (b) the amount each investorcontributed, (c) the equity transferred to each investor, and (d) theinvestment terms.

In one embodiment, the TC Module 940 tracks for each New Company towhich a Technology Contributor has contributed technology, thetechnology contributed to the New Company, the equity contributed to theDevelopment Entity, and the investment terms, including a description ofthe terms of the true-up right and the re-acquisition right.

In one embodiment, the IP Module 945 provides tools for trackingintellectual property. It provides tools for: (a) invention disclosurecreation and tracking; (b) patent application tracking and docketing;and (c) patent tracking, including tracking the payment of maintenancefees. Other, similar tools may be provided for trademarks, tradesecrets, copyrights and other forms of intellectual property andtechnology.

In one embodiment, the IP Module 945 also tracks the intellectualproperty developed by the Development Entity, whether the intellectualproperty has been transferred and to whom it has been transferred, andwhether a license has been retained.

In one embodiment, the Admin Module 950 provides all of theadministrative functions including human resources, accounting, legal,and true-up and re-acquisition management.

In one embodiment, true-up management includes retrieving costinformation from the DIU Module, Development Entity investmentinformation from the NewCo Module, outside investor information from theInvestor Module, information regarding the Technology Contributor'stechnology contribution and equity contribution and the investment termsunder which those contributions were made. In one embodiment, true-upmanagement presents some or all of those factors and a true-up cost iscomputed manually or another system computes the true-up cost. In oneembodiment, the Admin Module 950 computes the true-up amount.

Similarly, in one embodiment the Admin Module 950 uses similarinformation to present the factors necessary for the TechnologyContributor to re-acquire the New Company. In one embodiment, the AdminModule 950 computes the re-acquisition amount.

In one embodiment, each module's data is be stored in records inseparate tables in database 920. In one embodiment, such tables arerelated in a relational database using traditional techniques. In oneembodiment, the records are stored in fewer tables with several modulessharing one or more tables. In one embodiment, all of the data is storedin a single table.

Having described methods, apparatuses and articles of manufacture forextracting value from a large portfolio of assets, it is believed thatother modifications, variations and changes will be suggested to thoseskilled in the art in view of the teachings set forth herein. It istherefore to be understood that all such variations, modifications andchanges are believed to fall within the scope of the present invention.Although specific terms are employed herein, they are used in theirordinary and accustomed manner only, unless expressly defineddifferently herein, and not for purposes of limitation.

What is claimed is:
 1. A method for developing and tracking technologyassets in a computer system, said method comprising: receiving from anoriginating owner a first catalog of technology assets including atleast one of a patent, trade secret, know-how, documentation,prototypes, pre-production units, production samples, tooling, anddemonstration frameworks, said first catalog corresponding to a firstpool of technology assets having a subject matter in common; receivingfrom said originating owner, at said development entity, title to saidfirst pool of technology assets in exchange for an equity interest insaid development entity and an option to re-acquire the first pool oftechnology assets for a reacquisition fee; receiving from at least oneprimary investor, a capital investment in exchange for an equityinterest in said development entity; storing information about thereceived first catalog and title to said first pool in one of at leastone database, wherein both said development entity and said primaryinvestor are enabled to access the one of at least one database by useof a database interface; selecting a first new product concept from saidfirst pool of technology assets for development activity by thedevelopment entity; tracking, in one of at least one database, costsexpended by the development entity to develop said first new productconcept and to acquire proprietary rights associated with said first newproduct concept and associating said costs with the stored information,wherein both said development entity and said primary investor areenabled to access the one of at least one database by use of a databaseinterface; and transferring said first pool of technology assets,including results of all development activity relating to said first newproduct concept, to a first spin-off entity unless the originating ownertenders the reacquisition fee, wherein said first spin-off entity isenabled to access said one of at least one database upon transfer. 2.The method of claim 1, said method further including: receiving fromsaid originating owner a second catalog of technology assets includingat least one of a patent, trade secret, know-how, documentation,prototypes, pre-production units, production samples, tooling, anddemonstration frameworks, said second catalog corresponding to a secondpool of technology assets having a subject matter in common; receivingfrom said originating owner, at said development entity, title to saidsecond pool of technology assets in exchange for an additional equityinterest in said development entity and an option to re-acquire thesecond pool of technology assets for a reacquisition fee; storinginformation about the received second catalog and title to said secondpool in one of at least one database, wherein both said developmententity and said primary investor are enabled to access the one of atleast one database by use of a database interface; selecting a secondnew product concept from said second pool of technology assets fordevelopment activity by the development entity; tracking, in one of atleast one database, costs expended by the development entity to developsaid second new product concept and to acquire proprietary rightsassociated with said second new product concept and associating saidcosts with the stored information, wherein both said development entityand said primary investor are enabled to access the one of at least onedatabase by use of a database interface; and transferring said secondpool of technology assets, including results of all development activityrelating to said second new product concept, to a second spin-off entityunless the originating owner tenders the reacquisition fee, wherein saidfirst spin-off entity is enabled to access said one of at least onedatabase upon transfer.
 3. The method of claim 2, said method furtherincluding: receiving from a second originating owner a third catalog oftechnology assets including at least one of a patent, trade secret,know-how, documentation, prototypes, pre-production units, productionsamples, tooling, and demonstration frameworks, said third catalogcorresponding to a third pool of technology assets having a subjectmatter in common; receiving from said second originating owner, at saiddevelopment entity, title to said third pool of technology assets inexchange for an equity interest in said development entity and an optionto re-acquire the third pool of technology assets for a reacquisitionfee; storing information about the received third catalog and title tosaid third pool in one of at least one database, wherein both saiddevelopment entity and said primary investor are enabled to access theone of at least one database by use of a database interface; selecting athird new product concept from said third pool of technology assets fordevelopment activity by the development entity; tracking, in one of atleast one database, costs expended by the development entity to developsaid third new product concept and to acquire proprietary rightsassociated with said third new product concept and associating saidcosts with the stored information, wherein both said development entityand said primary investor are enabled to access the one of at least onedatabase by use of a database interface; and transferring said thirdpool of technology assets, including results of all development activityrelating to said third new product concept, to a third spin-off entityunless the second originating owner tenders the reacquisition fee,wherein said first spin-off entity is enabled to access said one of atleast one database upon transfer.
 4. The method of claim 1, whereinselecting a first new product concept includes analyzing several productconcepts having common subject matter related to said first pool oftechnology assets, analysis being with respect to at least one ofmarketability, patentability, and technical feasibility.
 5. The methodof claim 4, wherein tracking further includes tracking costs associatedwith said selecting.
 6. The method of claim 1, wherein saidre-acquisition fee is calculated as the product of the costs trackedduring said tracking and a scale factor negotiated by said originatingowner and said at least one primary investor.
 7. The method of claim 1,further including: upon payment of the reacquisition fee to the at leastone primary investor, transferring title to the first pool of technologyassets back to the originating owner.
 8. The method of claim 1, furtherincluding: upon payment of the reacquisition fee to the at least oneprimary investor and at least one member of a development teamresponsible for development activity associated with the first newproduct concept, transferring title to the first pool of technologyassets back to the originating owner.
 9. The method of claim 1, furtherincluding: transforming said first new product concept into a developednew product suitable for commercialization, said tracking includingtracking costs associated with said transforming.
 10. The method ofclaim 1, wherein transforming the first new product concept into adeveloped new product includes obtaining a degree of proprietaryprotection by filing and prosecuting at least one patent applicationcovering the novel elements of said first new product concept.
 11. Themethod of claim 1, wherein said at least one primary investor receives acontrolling interest in the development entity in exchange for saidcapital investment.